Europe#s innovation potential is currently dominated by well-established large companies. In most member countries the bulk of R&D expenditures is spend by large companies. Following OECD data, SME's share in total R&D spending amount to 8% in Germany or Japan, around 15% in US, France, Korea or...

The paper analyzes how geographical clustering of beneficiaries might affect the effectiveness of public innovation support programs. The geographical proximity of firms operating in the same industry or field of technology is expected to facilitate innovation through knowledge spillovers and...